Recycling the deposit?

[Josko]

I am trying to work out how you would be able to recycle your initial deposit on an IP into the next IP without having to wait the obligatory 6months.

Any ideas would be appreciated.

[kolzee]

Hi ivi,

i don't have any ideas on recycling the deposit any quicker however i do have the suggestion of doing work during this period such as adding a bedroom, etc. This will actually increase the value and therefore increase the amount of equity (deposit and additional value) that can be recycled for the next purchase.

This is what i am in the process of doing and looking to revalue on completion to release the increased amount of equity.

[tim360]

What about selling the IP, ie sell it to a different LAQC, you could then get it revalued. Would that work?

[Josko]

Yes, kolzee, thanks, the natural progression of deposit recycling. Thanks.

Thanks tim360, maybe, will put some though into that one. Though it seems a little manipulative, would it be legal, what about the costs, transfer of title, loans, would have to be between different banks.

Any other ideas?

[toby]

There are number of ways.
1. Tell the lender exactly what you are doing and show the first valuation with a ARV (after repair value).
Insure that the lender will let you refinance before taking out the loan.
You need to be able to justify the difference in valuation.
Most will tell you 3-6mths however it comes down to the relationship.
Which is why I don't use brokers on first tier lending.

2. Get a second tier loan like a building loan and then get a new loan once the title has come through.

3. Buy with a revolving credit or line of credit loan then do as above.

4. Use private funds and do as above.

5. Put the deposit in a fixed term account with the lender give them security then borrow 100% of PP.
Get them to release security after revaluation.

Lenders DO NOT believe you can buy houses at a discount and it is necessary in some way to show that you "fixed the place up" and now it's worth more, not that you got a great deal.

Hope that helps.

[MiniMogul]

removed

[drelly]

If you are that convinced that there is immediate equity in the property, it's worth spending a few hundred dollars to get some rooms painted and revalue for the benefit of the bank. Sure it's a game but it's their game, and that's the quickest way of getting them to accept a revaluation.

[Josko]

Great toby, that has me thinking now. Cheers.

Thanks MiniMogul and Drelley,

I have to admit I was a little confused but it makes more sense now. The only thing that had me biting at the bit is how you get 90 income steams within seven months. That is good going!

So with you comments I deduce

1)add value (even if it is a paint job)
2)second tier loan then get a new loan once the title has come through (this is interesting, will investigate)
3)revolving credit or line of credit loan (would have to wait for new valuation, for this one so approx 6 months).
4)private funds (ok, this means intermediates, like vendor leaving the deposit in or vendor finance, hard to get?).
5)deposit in a fixed term account with the lender give them security then borrow 100% of PP. Get them to release security after revaluation. (this I also like)

Still doing all this in seven months to get 90 income streams, unless of course you count say student accommodation with 30 or so rooms as 30 income streams.

Great motivational suggestions thanks all. On with the next one.

Cheers, ivi

[toby]

Ivi, when it comes to 90 income streams in six months or what ever, let me just say that there are lies, damn lies and statistics.
I personally know a ESC person who achieved alot in a very short time and won a prize, however they are not really in much of a better position.
They paid tens upon tens of thousands in finders fees which are not included in the numbers etc.
They have not "retired" they cannot live off the "cashflow" they created and basically have not achieved there financial goals.
BUT they got "income streams" - TUI!
It might sound good but you really need to delve a bit further.
I know a number of full time proffessional investors who have been in the game 10/20+ years and they would all have some concerns with this claim.
If it sounds to good to be true, it probably is.
PS. I'm not saying they don't own lots of houses It's just that I don't buy into the income side.

[learner]

Hi Toby

The cashflow is AFTER tax, as in this latest item on the ESC site:

Jonelle and Jane are the winners of $10,000 from the May 2004 Richmastery’s 2190 hour challenge. In just under thirteen weeks, the pair negotiated 54 real estate income streams, made $630,000 in immediate wealth and now have a property portfolio that has a market value of $4.97 million that will pay them after tax cashflow of $165,703 per year

Surely, that's what it means? Pretty impressive?

[ESC]

Toby

Toby,

We believe its important that when you draw conclusions about the results other investors achieve that you base your conclusions on facts rather than speculation, hearsay, innuendo or incorrect information.

when it comes to 90 income streams in six months or what ever, let me just say that there are lies, damn lies and statistics.

Jane and Jonelle have achieved the result, whether you like it or not and they will transperently show anyone that attends there 1 day course exactly how they did it. See below for more details...

http://www.richmastery.com/nz/defaul...rInvestors.htm

Toby, I'd like to offer you a challenge. I'll give you a free ticket to Jane and Jonelles 1 day course and if during they day they show you step by step what they did, how they did it and give you evidence of the result then you pay the ticket price for the course. If they don't, then the course is free.

Success should never be measured by those who choose to to achieve it.

Jane and Jonelle are not alone. Is Steve McKnight who went from 0 to 130 properties in 3.5 years fake when he has been on Aussie TV and mentored others publicly how to achieve similar results?. Is Ron Hoy Fong who went from 1 to 21 properties in 12 months earning a million dollars in equity and over $100K in cashflow also telling porkies? Are all the investors that have experienced superb investing results on the link below all mistaken?

http://www.richmastery.com/nz/defaul...ccess_main.htm

The answer is a resounding NO!

We should be celebrating the successes of other investors and being open enough to acknowledge our own weaknesses and learn from those that have achieved greater results than our own.

Its too easy to cut someone else down that you don't know, have never met and are envious of because of their success. New Zealanders are famous for the tall poppy syndrome and we think its about time we changed that.

PS Our finders fees are always included in the numbers

[Julian]

ESC

Congrats to Jane and Jonelle.

However, it must be realised that Steve McKnight was just one quarter of a four-member team that went from 0-130 properties in 3.5 years. To imply, as you did, that he did this alone is to create a false impression, in an effort to support your stance.

Steve, and the team are legends for the efforts they achieved which averaged about 9.3 properties per person per year.

Also, I can't recall reading that all 130 properties were retained at the end of the 3.5 year period - that is, there were a reported 130 property purchases, but there may have been any number of sales in that period.

Please don't interpret this to imply any lack of awe for the achievements of Steve, Dave and their respective wives, but it is important not to let the words get in the way of the reality.

Julian.

[Gatekeeper]

Hi Toby

The cashflow is AFTER tax, as in this latest item on the ESC site:

Jonelle and Jane are the winners of $10,000 from the May 2004 Richmastery’s 2190 hour challenge. In just under thirteen weeks, the pair negotiated 54 real estate income streams, made $630,000 in immediate wealth and now have a property portfolio that has a market value of $4.97 million that will pay them after tax cashflow of $165,703 per year

Surely, that's what it means? Pretty impressive?

I haven't been keeping up with the latest Guru's :P
But from these figures, it appears these girls have 90 properties giving after tax cashflow of $165,703. Correct me if I'm wrong, but isn't that just $1841 per property? I don't see anything great there. Comments welcome

[kolzee]

ESC,

I've got a couple of questions for you.

1/ Can you clarify whether Steve McKnight was a member of a team (it had been implied to me that he did this alone)?

2/ Why in the quote below do you not disclose the borrowing position on the property portfolio of $4.97m? I see this as a vital piece of information which would allow other to judge their results better?

Jonelle and Jane are the winners of $10,000 from the May 2004 Richmastery’s 2190 hour challenge. In just under thirteen weeks, the pair negotiated 54 real estate income streams, made $630,000 in immediate wealth and now have a property portfolio that has a market value of $4.97 million that will pay them after tax cashflow of $165,703 per year

Cheers

kolzee

[Josko]

Fellow forumites,

I make it a principle to only go as far as being disappointed at particular details of the many components that make up the challenge of property investment.

I have no affiliation with any organisation (and are aware of the fact that some here have) except to honestly deliver comment here at PropertyTalk, if you find me being disappointed all I am suggesting is that you "Stay Alert, Be Focused, Take Time And A Breath Before You Jump".

Knowledge is to know when you are at the ledge of transcending your self, utilise this wisely.

I have not known of any organisation whos creators do not start with the heart in the right place.

If I take exception, it is in the detail and I aim to enlighten others to this detail.

Sincerly, ivi